Chemical and Allied Products Plc has reported a 55.47 per cent drop in its Profit Before Tax for the first quarter of 2021, against expectations to see positive results in the year.
The ‘Unaudited Financial Results for the Period Ended 31 March 2021’ showed that the company’s PBT slummed to N299.09m in Q1 2021 from N671.63m in Q1 2020.
Its Profit After Tax also dropped to N203.38m in Q1 2021 relative to N456.71m posted in the corresponding quarter of 2020, which represented 55.47 per cent.
In the review quarter, CAP’s profit from operating activities was down by 60.37 per cent to N236.87m against N597.63m reported in Q1 2020. Its net finance income also fell by 15.91 per cent to N62.23m in Q1 2021 from N74.00m in Q1 2020.
CAP, a subsidiary of United Africa Company of Nigeria Plc, also reported a 39.93 per cent decline in its gross profit from N1.17bn reported in Q1 2020 to N701.09m in the review quarter of 2021.
The company, however, saw a growth in its total shareholders’ equity rise marginally by 5.43 per cent to N3.95bn from N3.74bn, while total assets increased by 14.15 per cent to stand at N9.73bn in Q1 2021.
The Managing Director, David Wright, stated on Tuesday, “In the first quarter of 2021, we saw the biggest impact of the COVID-19 pandemic on our business. Increased global demand for chemicals driven by the economic rebound in Asia and feedstock challenges, with several suppliers declaring forces majeures, resulted in a global shortage of raw materials.
“This significantly impacted product availability in the first quarter of the year. In addition, there was a scarcity premium placed on all available raw materials, which eroded gross margin across various product lines.”
Wright, however, said the company took steps to secure alternative raw material sources and increased inventory levels to mitigate against further disruptions.
“As such, we expect a strong recovery in the remaining quarters of the year. Our focus remains on creating shareholder value and we will continue to pursue attractive growth opportunities to achieve this,” he added.
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